Iowa Tax Filing Requirement (Nexus) For Out of State Business

Businesses located outside of Iowa frequently have representatives or employees in Iowa to maintain, establish, or further their market share within the state. The activities of these persons may create an Iowa tax filing requirement (nexus) for these businesses.

  • The Iowa Department of Revenue attempts to maintain current and accurate information on this site. The information contained here is intended to generally alert the reader to our position on nexus and other issues.

    The Iowa Tax Research Library contains policy statements, letters of findings, orders, court decisions, and other materials. Research your issue carefully, as documents in the Iowa Tax Research Library may have been superseded.

  • Sales/Use Tax: Companies that have a physical or economic presence in Iowa may be required to file returns. For more information about economic presence, see the Department's guidance on remote sellers for more information.

    Corporate Income Tax: (This also applies to S corporations, partnerships, and limited liability companies.) Iowa Code section 422.33 states that a corporation income tax is imposed on every corporation doing business in Iowa, wherever incorporated.

    There are two primary restrictions upon the State:

    1. The due process clause and commerce clause of the United States Constitution, and
    2. Public Law 86-272, passed by the United States Congress in 1959 and codified at 15 U.S.C., sections 381-386. If a corporation's only Iowa business activity consists of soliciting orders for the purchase of tangible personal property, Public Law 86-272 prohibits Iowa from imposing a corporate income tax. In addition, the orders must be sent outside of Iowa for approval or rejection. If approved, the orders must be filled from a point outside Iowa. For a review of Public Law 86-272, see Home Interiors and Gifts. Public Law 86-272 does not protect corporations which sell services because services are not considered tangible personal property.

    Following are nonexclusive brief descriptions of activities or situations which may create taxability:

    Sellers of tangible personal property: Employees or independent representatives (brokers) actually visiting Iowa that perform activities other than or in addition to the actual solicitation of orders. Rules 701--501.1(2) and 701--501.1(3)

    Service providers: Employees or independent representatives visiting Iowa. Rule 701--501.1 The state is not prohibited from imposing a corporation income tax even if the only activity in Iowa is the mere solicitation of orders for services benefiting customers in Iowa.

    Transportation providers only need to regularly or systematically have physical contact with the state. Rule 701--501.1

    Intangibles: Companies with intangibles, such as the licenser of trade names and trademarks, must file returns. Rule 701--501.1(4)

  • Requirements for filing by withholding agents are described in Iowa Code sections 422.15 and 422.16 and Rule 701-307.1. Additional information is available through the Withholding Tax Information page.

  • To register a business with us, simply complete the Iowa Business Tax Permit Registration, 78-005 form and mail or fax it to the address/number indicated or register online.

  • If you want assistance in determining if returns are required, you may use the following questionnaires to provide preliminary information to us. Include a cover letter explaining your need for such a determination and the date by which our response is necessary.

  • Iowa Nexus Questionnaire

    Note: This form can be filled in and then printed. Send it in by mail or fax.

    This online questionnaire can be filled out and mailed to the Department at the address below. If you have been contacted by the Department to complete this questionnaire, please include the reference number from our letter in your reply. This is to ensure your response is correctly recorded. If you prefer, you can Fax the questionnaire to the Department at 515-281-3756, attention Nexus Unit.

  • All information provided in the questionnaire is considered confidential per Iowa Code section 422.72.

  • Please note that the Department's response to an informal inquiry is not binding on the Department. See IAC 701--7.24(17A). For a formal declaratory ruling from the Department, see IAC 701--7.24(1).

    If you have questions about nexus or the questionnaires, please contact the Department:

    By email:

    By mail:
    Business Nexus
    Iowa Department of Revenue
    P. O. Box 10456
    Des Moines, IA 50306 - 0456

  • About the Nexus Program

    Doing business in multiple states and not registered? This program may be able to help you reduce the amount of taxes due in those states and eliminate penalty payments.